LAKE SHORE GOLD CORP 6.25 PCT DEBS T.LSG.DB

RE:RE:Obama's former chief economist: End US dollar reserve status

[Mongoose123]

Hi Baranja - I am not sure that I understand the example that you have used.  You state that 40 years ago a fellow invests $1,000 and ends up with $4000 today.  I presume that your example is based on a deposit in a typical bank savings account that pays an average of appx 3.6% annual interest over the last 40 years and that the annual tax aspect is ignored.  So far I am with you - your guy ends up with $4,000 today.

Now CPI over the last 40 years in Canada from 1974 - 2014 is approximately 477.95 according to the Bank of Canada (1974 = 100).  So for your guy to have the same buying power today as he did in 1974 his $1,000 investment must grow to at least $4,779.50.  So he has come up short by only $779.50.  His 500 hour (1974 investment) is now buying him 418.45 "hours" of 2014 investment. How did you determine that his original 500 hour investment is now only worth 100 hours??